The NASDAQ notches gains on volume as market leaders continue to show strength

The euphoric reaction Sunday evening to the Irish bailout news did not last very long.  Futures continued to erode their gains as the open neared.  Buyers initially were able to prop up the market, but sellers quickly pushed stocks lower as insider trading raids from the Feds scared the market.  NYSE volume ran lower, but the comparison comes on the back of Friday’s inflated figure from options expiry.  On the other hand, the NASDAQ had volume running higher most of the day.  After mid-day the market found buyers and pushed all the indexes higher by the close.  The NASDAQ, our big index leaders showed tremendous strength and a big accumulation day.

Market leaders held up nicely throughout the entire day and did not succomb to the overall market weakness.  It is always important to see market leaders buck the market trend when the market is clearly weak.  At the lows the Dow Jones Industrial average and the S&P 500 were down more than one percent as fears over insider trading raids spread through the market.  Many traders tried to jump out in front and began to sell stock, but clearly this strategy was not a fruitful one.  The Big Wave Trading Chat Room doesn’t panic and try to catch market turns.  This market remains healthy and we continue to look for this market to push higher.

Tomorrow’s market will get a dose of economic news, none bigger than the annualized GDP figure at 830.  But, after 8:30 the market will look to the Federal Reserve meeting minutes set to hi the market at 2pm.  Much will be made of the figures, but the reaction will be the important key to watch.  Initial reaction to the meeting minutes will certainly be wild like it is after every Federal Reserve release, but how we end up will be important.  This will include the market action from our leaders.  Again, at the moment we have very positive movements from our stocks as well as the market.  Nothing at the moment is giving us full all out “warning signals.”

Last week IBD put the market in correction, a call I do not agree with and one they may regret.  Over the past few market corrections IBD has been less than stellar and at this juncture they do appear to be a bit early on the correction call.  We are not looking for another follow-through day to confirm a new rally, but a continuation day with big gains on big volume would certainly be welcomed from our end.  We continue to push forward with our longs and continue to ignore the noise stemming from the financial media.

Make sure you cut your losses short!